11. Specific tasks for the European Central Bank concerning the functioning of the European Systemic Risk Board - Powers of the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority - European Securities and Markets Authority - Macro-prudential oversight of the financial system and establishment of a European Systemic Risk Board - European Banking Authority - European Insurance and Occupational Pensions Authority - Cross-Border Crisis Management in the Banking Sector (debate)
President. – The next item is the joint debate on the following:
- the report by Mr Tremosa i Balcells, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a Council Regulation entrusting the European Central Bank with specific tasks concerning the functioning of the European Systemic Risk Board [05551/2010 - C7-0014/2010 - 2009/0141(CNS)] (A7-0167/2010);
- the report by Mr Sánchez Presedo, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a directive of the European Parliament and of the Council amending Directives 1998/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Banking Authority and the European Insurance and Occupational Pensions Authority [COM(2009)0576 - C7-0251/2009 - 2009/0161(COD)] (A7-0163/2010);
- the report by Mr Giegold, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council establishing a European Securities and Markets Authority [COM(2009)0503 - C7-0167/2009 - 2009/0144(COD)] (A7-0169/2010);
- the report by Mrs Goulard, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council on Community macro-prudential oversight of the financial system and establishing a European Systemic Risk Board [COM(2009)0499 - C7-0166/2009 - 2009/0140(COD)] (A7-0168/2010);
- the report by Mr García-Margallo y Marfil, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council establishing a European Banking Authority [COM(2009)0501 - C7-0169/2009 - 2009/0142(COD)] (A7-0166/2010);
- the report by Mr Skinner, on behalf of the Committee on Economic and Monetary Affairs, on the proposal for a regulation of the European Parliament and of the Council establishing a European Insurance and Occupational Pensions Authority [COM(2009)0502 - C7-0168/2009 - 2009/0143(COD)] (A7-0170/2010); and
- the report by Mrs Ferreira, on behalf of the Committee on Economic and Monetary Affairs, with recommendations to the Commission on Cross-Border Crisis Management in the Banking Sector [2010/2006(INI)] (A7-0213/2010).
Ramon Tremosa i Balcells, rapporteur. – Mr President, at the origin of this financial crisis are the national supervisors. Our financial markets are integrated at a European level and in every country the main financial institutions are cross-border institutions, but financial supervision has remained only at national level.
At this stage, and with the huge crisis we are suffering, there are only two possibilities. We can reinforce the national supervisors or we can create European supervisors in order to adapt European financial supervision to the globalisation process. In this report, I propose a closer link between the European Central Bank and the European Systemic Risk Board. The President of the ECB will also be the Chair of the ESRB and represent the ESRB externally.
In my opinion, the European Central Bank has gained credibility and has become an institution of worldwide renown in this financial crisis. It has been recognised all over the world, including by some Anglo-Saxon experts, such as David Marsh, the Chairman of the London and Oxford Group. In my opinion, the European Central Bank is the only European independent institution that will have the moral and material authority to play an important role in future European supervision of both financial markets and financial institutions.
To justify why a closer link between the ECB and the ESRB is needed, we can see what is happening in other countries outside the eurozone. Three weeks ago, it was my pleasure to read in the Financial Times that Mr George Osborne, the UK Conservative Finance Minister, has decided the biggest overhaul of City regulation since 1997. The UK splits the main financial regulator and gives more power and more clout to the Bank of England. In the same direction that we are now proposing, the UK has abolished the English tripartite structure, formed by the Bank of England, the Financial Services Authority and the Treasury. Mr Osborne said that it had failed to prevent the crisis because no one knew who was in charge. Mr Osborne will hand the Bank of England full control for monitoring systemic risk in the economy as well as oversight of individual banks.
Finally, I completely agree with Mr Osborne when he argues that nowadays, only independent central banks have the broad macro-economic understanding, the authority and the knowledge required to make the kind of macro-prudential judgments that are required.
This report was voted in the Committee on Economic and Monetary Affairs with a large cross-party majority, so I believe that, with these arguments, the UK Conservatives will also vote in favour of my proposal at European level.
To close my speech, this is not time for a debate on a second order reform. I know that state nationalism is now rising in the EU and I know that there is no consensus for such sweeping reform, but this is our choice – jumping to a political and economic union or reverting to our insolvent nations.
Let me conclude by saying that, in my opinion, only a closer and stronger union can save the eurozone.
Antolín Sánchez Presedo, rapporteur. – (ES) Mr President, the financial supervision package is one of the most important legislative measures that has come before the European Parliament, and is a decisive step towards improving the economic governance of the European Union.
Work on it, which began formally in September 2009 with the presentation by the Commission of the legislative proposals that followed the report by the de Larosière Group, has deeper roots in this Chamber.
I would point, in particular, to the work of all of the Members who, for years, have advocated European financial supervision and, in particular, those who represent my group.
When the Council adopted its position under the Swedish Presidency, in December of last year, the main parliamentary groups held it to be insufficient for addressing the deficiencies detected. The rapporteurs were subsequently able to reach a broad agreement in the Committee on Economic and Monetary Affairs, which was put to the vote on 10 May of this year.
The trialogues began the following day. A marathon series of meetings has taken place since then: 18 under the Spanish Presidency and two under the Belgian Presidency. There has been very significant progress on fundamental issues which are already important bases for the agreement: the definition of objectives; consumer protection; the role of the authorities within the regulatory process; the checking of compliance with legal standards; the establishment of binding mediation; the temporary banning of products; the introduction of the notion of systemic risk and the strengthening of supervision relating to it; the development of the concept of the ‘stakeholder’; proper use of the safeguard clause; the authorities’ voting system, etc.
When including this item in this plenary sitting, we had anticipated completing the negotiating process by this date. We wanted to send a positive signal to the public and to the financial markets, declare our commitment to the authorities being in operation by 1 January of next year, and associate ourselves with the arguments of the European Council in favour of a speedy conclusion to the negotiations.
We have been open up to the last minute to reaching a compromise, but the technical, legal and political complexity of the proceedings has not allowed us to arrive at a final text.
In addition, the new Presidency of the Council has expressly requested time to bring its positions into line with the prospect of an agreement upon a first reading.
As colegislators, we need to continue making an effort, as this agreement is still possible. We rapporteurs have therefore decided to vote for the text that reflects our commitment, endorsing the ambitious mandate of the Parliament, but not to put the legislative resolution to the vote. This leaves some leeway for reaching a compromise at a first reading within the next few weeks.
The ‘Omnibus’ Directive, for which I am rapporteur, introduces the new supervision architecture into 11 sectoral Union legislation directives relating to banking and securities markets. It is not a case, therefore, of a regular, generalised review. There is a great parliamentary consensus on doing this by preserving the acquis communautaire, adapting the comitology procedure to the Treaty of Lisbon, and updating the Lamfalussy architecture within the context of financial services.
Financial supervision must be based on the existence of a set of standards, a ‘single rule book’ at European level, and to achieve this, a key role for the authorities in drawing up technical, or even regulatory, standards, by means of delegated acts or implementation measures, has been acknowledged throughout all of the sectoral legislation, in accordance with the Treaty of Lisbon. The Commission has been given the necessary powers to ensure its adoption within the anticipated timeframe. All competences and powers have been incorporated into the sectoral legislation.
I hope that the negotiations on this directive can be brought to a satisfactory conclusion.
Sven Giegold, rapporteur. – (DE) Mr President, ladies and gentlemen, I feel that it is nothing short of symbolic that the Council’s seat is empty just when we are coming on to this item. I am aware that the Council is currently attending the swearing-in ceremony, giving it a good excuse for its absence. However, the Council’s empty seat is indicative of the fact that now, after very many weeks and 18 trialogues on the core packages, which are the ESRB and the individual supervisory authorities, we have still not received any written common position from the Council in which it expresses its response to what we have done as a parliament.
Parliament has the following message, which is supported by a large, overall majority. We will not allow the Council to water down the proposals made by the de Larosière group and those submitted by the Commission itself into a nationally prejudiced, parochial approach, by not responding to the experiences from this crisis, but engaging instead in narrow-minded bickering over powers, without seeing which solutions were effective and what form financial supervision must take in a European internal market, but rather by ensuring that it did not give up any of its powers which, as has been very apparent in recent years, have not been exercised effectively at all because Europe’s financial centres have been competing with each other to make the best offers and people were happy to turn a blind eye occasionally to what was going on.
Since then, we have had a wide-ranging discussion about many issues. Europe’s citizens do not understand why a common European Financial Supervisory Authority is going to be spread across three different cities. They also would have expected these authorities to be granted strong investor and consumer protection rights. This is the decision we have come to now in Parliament. There also seems, fortunately, to be a broad consensus that this step is necessary.
The regulation of derivatives will create new European market infrastructures. It should be the norm for public goods in Europe to come under European scrutiny as well, and not just from national state institutions. We also insisted in Parliament on the new authorities receiving rights allowing them to ban risky financial products.
Let me spell it out: the aim is not to stop the introduction of innovative products on the financial markets. If things turn out to be risky, however, there should be an opportunity to ban these products throughout Europe. This principle is now accepted in the negotiations, but while the details are being ironed out, attempts are being made to make it so difficult to ban products that it is hardly likely to be applied in practice, and at least not to innovative financial products.
Then we have the long debate about direct decision rights. This was another case where we had to fight against the suggestions being watered down. The key point remains: if a real financial crisis breaks out, who declares the emergency? The Council insists that it should be the Council itself which should decide that decision rights should be transferred from Member States to a European authority. Will the Council ever do this? It is insisting that the fox should be put in charge of the henhouse. This does not make any sense, a fact which the Commission has also continually pointed out. So far, the Council appears inflexible.
The Council also insists that any decisions made by the European authorities at the time when they are curtailing Member States’ budget rights can be reversed. We are happy to accept this principle, except for small amounts and not if it involves, for instance, reducing tax revenues. It must be a case of large sums being allocated by means of a decision at European level.
In other words, in spite of negotiations lasting months and 18 trialogues, we are still not close to finalising everything. It is now over to the Council. We must now vote on this matter this week and send out a clear message to ensure that the Council finally heeds our citizens’ calls and establishes an efficient, uniform European Financial Supervisory Authority, capable of providing an adequate response to the crisis. On that note, I am sure that we will continue our constructive cooperation in this House, and I am obliged to all my fellow Members for this.
IN THE CHAIR: ROBERTA ANGELILLI Vice-President
Sylvie Goulard, rapporteur. – (FR) Madam President, Commissioner, with the Presidency absent, I believe that at this stage, we must look at where we are coming from and what we have done these last few months.
When we were living through the worst part of the crisis, every one of the actors, whether it was the governments, Parliament or the Commission, agreed that we needed strong and well-organised financial supervision in Europe.
Since then, the Commission has done its work. It commissioned a report from Jacques de Larosière. This report, which is of a high quality, served as the basis for a package of texts which, I believe, shows a high level of ambition for the introduction of these authorities.
Parliament has also done its work, and in particular, we voted last May, in the ECON parliamentary committee, for a strict text which has gone even further than the Commission’s proposal, taking particular account of the latest developments connected with the crisis in Greece and in the euro area.
As for the Council, it has got its scissors out and, from the start, it has been intent on slimming down the proposals that have been made by the Commission. Last December, the Swedish Presidency achieved a unanimous agreement, which, however, Parliament said was not satisfactory, even on the day it signed it. The Spanish Presidency has strived over these last few months, but has not managed to fill in the gaps, and here we are with a new Presidency which has shown a lot of energy since last Thursday, but which has not been in place for long.
For this reason, Parliament accepted that it has to take a rather complicated step, but one which we can explain to the citizens and which involves giving the Belgian Presidency a chance without sacrificing anything fundamental.
We are making quite a remarkable effort to say that we are going to vote tomorrow on the amendments to the ECON text; there is a text by Parliament in plenary. Quite simply, we are not completing the procedure at first reading in a way which gives our Belgian friends a chance.
I would like to emphasise the points on which, in my view, the Member States will have to move in order for Parliament to accept an agreement. First, there are the issues concerning efficiency. We were reminded of this very well by the previous speakers, and I would like to emphasise that there is a quite remarkable level of agreement between the four main political groups, which allows us to move forward with a common front.
We need the authorities to be European; we need them to be able to decide, at the European level, in a certain well-defined number of cases. This is not a question of replacing national supervisors, but when there is an urgent need, when there are toxic products on the market, when there is a violation of Community law, when the national authorities are arguing, we in the internal market really need decisions to be made at the European level. We do not need a safeguard clause. On this question, I would nevertheless like to make a comment. Who do the Member States want to protect themselves from when they plan safeguard clauses against Europe? It is as if there were a conspiracy here, with people aiming to get their hands in the Member States’ coffers. All of that is grotesque. We need a system which works and in which decisions can be taken, and without abuses, as Mr Giegold reminded us, but also without giving a kind of generalised right of veto to Member States who do not want to do anything.
We also want these authorities to be located in a single place, for reasons of efficiency. We have made proposals and counter-proposals to which successive Presidencies have not, to this day, deigned to give the slightest response. I believe that, when we ask for employed people to make adjustments which are as important as they are now, saying that the Member States cannot envisage the transfer of some authorities to a single city is a massive joke to our fellow citizens.
I would like to make a final point relating to the issues concerning information from Parliament and the control of authorities that we want to be independent. We want them to be independent, but because we want them to be independent, we also want responsibility and dialogue to be possible with those elected by the people. On this matter, we have also made some requests. We have also asked for greater openness from these bodies.
I would like to say one final word relating to the United States. I am always shocked when people tell us that the Americans have pulled ahead. I also notice that a number of governments are having discussions in two stages. First, we refuse any federal state. We refuse any new stage of integration and we decry the Community method. Then, later, we always compare ourselves to the United States. There comes a time when we have to abide by our responsibilities.
I want a stronger Europe. We want supervisory authorities which are able to function and which can find a place for Europe, at the global level, in this great competition that we are experiencing at the moment.
José Manuel García-Margallo y Marfil, rapporteur. – (ES) Madam President, Cassandra had a gift: that of telling the future. She also bore a curse: that of not being listened to. For this reason, Troy fell.
Parliament anticipated more than 10 years ago that liberalising the markets, without putting in place European supervision mechanisms at the same time, would lead to a crisis in the system, for one very simple reason: cross-border institutions cannot be supervised by national authorities whose jurisdiction ends at their borders. They can only be supervised by European authorities. We did not take heed of this, and the crisis erupted. Exotic products, unknown even to their creators, flooded the markets. Nobody trusted anybody else, nobody lent to anybody else, and credit dried up. The result: 23 million unemployed and EUR 3.5 billion – one third of our production – committed to aid the financial sector. Now what?
We in Parliament have been at odds with the Council for some days now. Parliament has given a great deal of ground in order to reach an agreement; the Commission too. The Belgian Presidency has shown great willing. It has asked us for time. We are going to give it time, but let us show today that Parliament is united, that it has very clear ideas. For this reason, let us vote massively in favour tomorrow of the amendments that the most influential groups within this House have put forward jointly. There are several ideas that Parliament would like to highlight. The first is that the crisis will only be overcome when confidence recovers and transparency is re-established within markets, institutions and products. This will only be possible when there are European supervision authorities that are credible, strong, independent and subject to democratic control: authorities that are not limited to meekly repeating the slogans emanating from national governments.
What does it mean to say that they are European? It means that they must have real power to ban the sale of toxic products; it means that they have real power to put an end to the regulatory distortions that prevent the market from working; it means that they must have real power to require national supervisors to always operate in defence of European interests. National supervisors cannot be feudal lords invested with absolute power. The European authority must ensure that the law is obeyed, that national authorities do what they need to do when there is a threat of pandemic, and that they are able to resolve conflicts when colleges of supervisors do not want to do so, or cannot. They need to be able to require private institutions that are offside to do what they need to do when national colleges of supervisors notice any omissions within the European guidelines.
The second lesson is that, among cross-border institutions, there is a special, singular type: those known as systemic institutions. An elementary truth about capitalism is that when it is done well, money is made, and when it is done badly, money is lost. This governs everything except systemic institutions. When things are going well, they make a fortune, and when things are going badly, it is the taxpayer who has to run to their aid. To resolve the problem of systemic institutions, there are only two solutions, only two: either supervisors within the countries where they operate are given greater powers to control their solvency and liquidity, which would lead to the removal of the European Parliament from the equation, or truly European institutions are put in place, which is what this House is proposing.
This means that European authorities need to watch over these institutions with particular zeal, as their ruin will be the ruin of all. It means that the European institution needs to be provided with resolution and control mechanisms for stabilising endangered institutions, if this is possible, or to wind them up, if this is not possible. Lifeboats should be made ready before the voyage, not in the middle of a storm. Also, these systemic institutions need to be required to pre-finance, to provide funds for guaranteeing the interests of depositors, which is our main concern, and for paying the costs of a crisis when it occurs. What cannot happen is for the taxpayer to have to carry the can again. What cannot happen, as the Americans say so often, is for ‘Main Street’ to have to pay for the excesses of ‘Wall Street’ again.
I would ask the ladies and gentlemen of the Council who are absent today – they have been very active this morning, talking on the telephone, and it seems that the storm has passed and things are calm, and they are still not here – to convey the same message through the Commissioner. The Council has asked for time. Parliament has given it time. Let nobody be confused, however: this is not a sign of weakness. This is a sign of the strength of this House. The strength of a body that believes in what it says, and feels that it has the support of the public, who back it. The Council and the Commission, which is doing a magnificent job, needs to make use of this time to forge a parliamentary consensus on the European direction, in the direction of Europe. It must not make use of this time to try and put together blocking minorities in opposition to Parliament. I ask the Council to listen to Cassandra for once. Today, Cassandra is the rapporteurs who have spoken. Cassandra is also Commissioner Barnier. Those who are not Cassandra know only too well to whom I refer.
Listen to Parliament, seek an agreement, say here what was said in Toronto. Do not say one thing here and another there. As old Castilians say, if the Council does this, God will reward it, and if not, God will demand it. God and this House.
Peter Skinner, rapporteur. – Madam President, I would like to focus on the EIOPA report, which is about the Insurance and Occupational Pensions Authority. As most of you are aware, insurance and occupational pensions are two subjects very close to my heart, indeed probably the subjects in which I have been most interested in the ECON Committee.
Solvency II, which Parliament voted on last year and on which I was the rapporteur, is the piece of legislation that, in fact, I am most proud of to date. It remains the most comprehensive piece of sectoral financial services legislation voted on in this Parliament. I expect it to reduce both consumer costs and systemic risks posed by the insurance sector, such as they are. A large part of Solvency II is devoted to overcoming the challenges facing supervisors and supervisory colleges in managing the risks and complexities associated with large cross-border insurers. As such, Solvency II is intimately linked with the proposals for EIOPA. EIOPA, in my opinion, provides the oil that will allow Solvency II to operate more effectively.
It is perhaps because of my experience with Solvency II that I was keen to take on this report. I knew that it was the context in which we could make Solvency II really work. It has also meant that in the ECON debate, I was unable to support some aspects of the more ambitious plans of some of my fellow supervision rapporteurs in the areas they have described that I could initially support, such as day-to-day supervision of financial institutions or resolution funds up by January 2011. This may or may not be appropriate for banks or capital markets, but for insurance, the debate is really open. Insurance is not banking and I am glad that my fellow rapporteurs have accepted that.
The concerns I have raised are now recognised by many as legitimate and all parties no longer believe that there is a dispute. Direct supervision and resolution fund projects are for those for the coming years and the rapporteurs are, I believe, converged in their belief on this point. The objective of the Commission is that the three sectoral ISAs should, in fact, be the same in terms of composition. The sectoral legislation, principally in this respect Solvency II and IORP, will define what specific powers EIOPA will have.
Thus, the rapporteurs have worked on the basis that what goes into one ISA at this stage must be read across to the other two, and it is because of my concerns at the outset that some of the ambitions behind this were perhaps not as directly appropriate for insurance and pensions that we have – if you like – the nuances which we can read into the EIOPA. They will not be different but they will be balanced. They are not necessarily the headline-grabbing areas but I believe we can rely upon something which will work – and work just as well across the board as if it were any of the other sectors.
One of my key objectives was to ensure that there was a counterbalance from the micro cross-sectoral level to the one which is operated by central bankers in the ESRB. Whilst I accept Mr Tremosa’s point about central banks, it is also important that we have this balance in the micro-supervisory field as well. That is why I am so pleased about the joint committee – which we have been able to reveal and to push forward, where we can see that this balance will be held – and that my joint rapporteurs have accepted this point as have, I believe, also the Council and the Commission. This is a real gain for Parliament. I also believe that having, of the three ISAs, one of the revolving chairs as a Vice-President of the ESRB is quite essential also for a plurality of the views which have to be heard from the coalface.
We have to take into account that EIOPA will be reflecting two connected, but different, sectors so we must have the stakeholder groups involved too, reflecting both those sectors. As I have stated, the ISAs come from sectoral legislation and for insurance, I believe that Solvency II and EIOPA are an excellent marriage.
For pensions, the question is up in the air. A lot will now depend upon the Commission’s report on the IORP, and I hope to work closely on this, but I believe that there is a deal here for us to make, a deal which we will make in the forthcoming days – perhaps weeks – which will benefit greatly EIOPA and the role Parliament has played in defining its powers, which I believe will serve consumers and, of course, the authorities around Europe, well.
Elisa Ferreira, rapporteur. – (PT) Madam President, Commissioner, never has the European project, built with such effort over the last 50 years, been as threatened as it is today. The European public’s frustration is enormous: the financial system which should serve them has destroyed their savings, their pensions, their investment projects, and their jobs; in short, it has destroyed their future.
In terms of the necessary strengthening of the whole financial services market, banking, insurance, and securities, the road to follow is clear and resides in the architecture which we are discussing here today. In fact, we need strong European supervision architecture, covering all products and actors, endowed with efficient methodologies and intervention instruments capable of responding to a market reality which does not recognise national frontiers, especially in the European context.
Risk cannot and should not be eliminated from the financial market, but we need regulation which makes this risk more transparent, and which avoids the accumulation of bubbles that affect the whole system when they burst, spreading to the real economy. However, if new crises occur in the future despite these defences, it is crucial to have mechanisms available that limit contagion, especially regarding the banking system, because this is vital to the economy’s functioning and is the depositary for Europeans’ savings. Here, in the very powers and competences of the European Banking Authority, resides the capacity to execute a new strategy for the management of transnational crises in the banking sector, a topic referred to in my report.
It is not in our hands to prevent the bankruptcy of banks, but rather to ensure that their reorganisation or possible winding up are carried out in an orderly fashion, limiting the collateral effects in the rest of the system and, above all, preventing the taxpayer from being the one who foots the bill for the resulting crises. For this, we need a series of new mechanisms, we need to adopt rules, definitions, methodologies, instruments and terminology common to all those intervening in operations of restructuring, reorganisation or winding up. We need to harmonise all the relevant national legal frameworks for crisis management, not least the laws for bankruptcy and winding up. We need to attribute wider powers of intervention to the supervisors. We need to specify clear criteria, not just quantitative but also qualitative, that allow intervention in an institution in difficulty. We need to prepare contingency plans. This entire process takes time for 27 Member States.
However, around 50 of the 12 000 banks operating Europe represent 70% of assets. This means an enormous concentration of risk, but also an opportunity to intervene primarily in them. There exist, therefore, conditions for us to propose a special and urgent process of listing those banks whose size and relations with other banks make them transnational, potentially giving them a systemic impact on the financial system. For these banks, it is possible to anticipate special supervision by the new European Banking Authority, even if operating in the college of national supervisors. Owing to the risk that they generate, it is possible and urgent that they begin to make contributions to a fund to finance any interventions that may be necessary; and it is important that the European Banking Authority should create a specialist unit to coordinate interventions in the case of difficulties in these banks.
The package of proposed elements ensures that the interventions in transnational banks of a systemic nature are consistent and coherent between the various countries and, above all, that they comply with a principle very dear to Europe: that the costs of the pollution caused by these banks should be borne by the polluter.
This proposal fits perfectly well in what we are discussing, above all, in the competences of the European Banking Authority; I would even say that it is the most obvious test of its efficiency. There was a huge majority – 87% – in favour of this proposal in the Committee on Economic and Monetary Affairs vote. We are counting on a massive vote in favour in this Chamber too, in the knowledge that by massively supporting this visionary, realistic and pragmatic proposal, we will be taking urgent and necessary action to re-establish Europeans’ faith in Europe, in its financial system, and, especially, in its banking system.
Olli Rehn, Member of the Commission. – Madam President, the Commission appreciates the constructive spirit that has guided the trialogues where the regulation on the European Systemic Risk Board was negotiated. I want to thank the rapporteurs for the formidable efforts they have made so far, and the work is bound to continue.
As you well know, the latest trialogue actually took place yesterday evening. We regret that an agreement could not be reached for adoption at first reading at this plenary part-session, but we are satisfied that all parties are committed to carrying out the adoption by September.
I understand that many of the discussions between the Council and Parliament revolve around people and institutions and who will do what in the ESRB. Should the Chair of the ESRB be elected, or should he or she be automatically the ECB President? Should the ESRB general board and steering committee include outside independent experts and, if so, with or without voting rights? Should the President of the EFC participate in the work of the ESRB? I am confident that these diverging requests by the Council and Parliament can be merged into a mutually acceptable solution.
The same goes for the many discussions revolving around the involvement of the Council and Parliament in the follow-up to the recommendations of the ESRB. There again, an agreement is not far away. I trust there is no divergence that cannot be resolved by a thorough negotiation and appropriate wording to avoid any misunderstanding on the respective prerogatives of both bodies.
So while I somehow regret that Parliament will not be able to vote on a text fully agreed with the Council now at this session, I am still delighted by the clear willingness shown by all to reach an agreement by September.
Finally, let me say frankly that we badly needed a modern supervisory architecture, as well as a body doing analysis of systemic risks to macro-financial stability, well before the financial crisis hit Europe. We would be much better off now in dealing with the financial repair if we had already had this at our disposal.
I therefore want to stress again that the fact that the new supervisory framework will be established rapidly, and certainly by 1 January next year, is indeed sensible. Our citizens expect action without further delays, which should be possible considering how much we agree in the fundamentals and how close we are to an agreement on even the details.
Equally important, the ESRB is an essential building block of a genuine economic and monetary union of its stronger economic pillar and thus of our systemic response to the financial crisis. It is also a key building block to restore and reinforce confidence in the European economy which is so much needed now. In order to strengthen the economic recovery, to strengthen confidence, we need to deliver on all fronts: safeguard financial stability, pursue fiscal consolidation, conclude financial repair and especially the new supervisory architecture, and reinforce economic governance. Only by making concrete and rapid progress on all these fronts can we strengthen the recovery and solidify the economic and monetary union. I count on your support on these very important endeavours.
Michel Barnier, Member of the Commission. – (FR) Madam President, ladies and gentlemen, it was a good idea for Parliament to join the debate on the supervision and management of the crisis.
It is also only fair to talk about these two major topics in a more general context, as we will have to act to obtain reinforced capital requirements and improved corporate governance, and to bring these to completion. We will come back to this, as I will have the opportunity of returning, as you know, in the next few weeks or months, to a series of proposals which were put together in an agenda approved by the Commission on 2 June, which the Council of Finance Ministers supported, and which the European Council adopted. We will also see –and I echo what many of you said – if there is a real consistency between decisions taken at the G20, decisions taken at the European Council and decisions taken at the Council of Ministers in the same vein.
There are many subjects which are part of this architecture of prevention, crisis management and supervision. I am thinking of the funds for resolutions that we have proposed, like Mrs Ferreira herself, in the context of crisis management. I am also thinking of the earlier proposals of Mr García-Margallo y Marfil, and we will present legislative proposals on these subjects in 2011. There is also financial corporate governance and banking capital. I will come back to this when talking about Mr Karas’ report.
I would like to say a few words on the two subjects for today. First, I will address supervision, which is effectively the backbone. This is an extremely serious subject and, as you have said, if we do not succeed in creating credible authorities and the European Systemic Risk Board, many other reforms will not be effective. Some weeks ago, we spoke of rating agencies – I will come back to these – and the implementation of prudential norms. We need this credible European architecture of supervision. This is why I want to welcome the high level of ambition that has been shown by your rapporteurs throughout the past few months: Mr García-Margallo y Marfil, Mr Skinner, Mr Sánchez Presedo, Mrs Goulard, Mr Giegold, Mr Tremosa i Balcells and Mr Balz, and particularly the level of ambition concerning the power of these authorities and their legally binding authority.
We find here the spirit and the philosophy of the Commission’s proposals. We found some new ideas there, which we should use, to improve the European system of financial supervision, as well as the reinforcement of consumer protection that Mr Giegold proposed, notably to prohibit certain financial products. I am thinking of the role given to the authorities in the identification of systemic risks and in crisis situations. I am thinking of the reinforcement of the joint committee, as advocated by Mr Skinner. I am thinking of the improvement in the transparency of the markets, which we discussed in the context of the Omnibus Directive that Mr Sánchez Presedo is piloting.
These are only a few examples: the most difficult things still lie ahead of us. Naturally, we have done a lot of work or, in any case, I have worked with you, for five months. We have made a lot of progress, but even if we are in the final straight, as I hope we are, we have not yet arrived at an agreement and what I would call a dynamic and credible compromise so that this can function. Although she is not here today, I want to welcome the Belgian Presidency, who, from the first few hours – 1 July, 10.00 in the morning – has responded through her finance minister, Didier Reynders, and who participated, very late yesterday evening, in a trialogue with many of you.
I want to repeat what Mr García-Margallo y Marfil said. We need the Council to understand that now is the time to act and to make progress. Others have also said this. In any case, the Commission, with the competences that it has, will do whatever is necessary to encourage the Council to seize the opportunity that you are giving it – this is my understanding of the situation. The ball is in its court to use these few days to reach an intelligent and credible agreement. You can count on me to be available.
I would like to say a few words on crisis management and prevention in order to thank Mrs Ferreira for her commitment. I have myself believed in precautionary measures for a long time. I have thought for a very long time that, as regards ecological risk, industrial risk and financial risk, the polluter must pay, that a cure always costs more than prevention, and that, when we need to prevent or cure, it is not the taxpayers who should be called upon first and foremost.
That is the spirit of the toolbox that we will be presenting to the Council of Ministers. We will bring forward many of the tools that Mrs Ferreira herself proposed, and we will translate these proposals into legislative proposals. I make the commitment that a legislative text will be presented to you. This is a subject on which I committed myself on the very first day – on 13 January – before you and before the ministers, during the course of my hearing and at the Ecofin Council in Madrid. You can count on me to present this credible toolbox, relying on the proposals of Mrs Ferreira, because, once again, I am convinced, in this area as well as others, that prevention costs a lot less than cure.
Sebastian Valentin Bodu, rapporteur for the opinion of the Committee on Legal Affairs. – (RO) I would like to say that I am speaking as the shadow rapporteur for the opinion.
The current financial crisis has highlighted the lack of effective management of crisis situations which have arisen in cross-border financial entities in the EU.
There have been different approaches adopted at national level. In general, the authorities have either used public funds to bail out the banks or they have isolated the banks’ assets in their own country, applying national instruments to tackle crisis situations, but only at the level of their own branches.
These actions have heightened the risks associated with the loss of confidence, distortion of competition, legal uncertainty and the high level of costs incurred for bailing out the banks, borne by taxpayers.
Finally, we need measures at European level to stop the management of crises involving a cross-border banking group using national systems, which may be extremely different, and which tend to protect branches located on their own territory and not resolve the problem faced by the group as a whole.
Raffaele Baldassarre, rapporteur for the opinion of the Committee on Legal Affairs. – (IT) Madam President, Commissioner, ladies and gentlemen, the crisis has confronted us with the evidence that greater coordination at European level is an absolute priority for the development and stability of the financial markets.
That said, I shall limit myself here to highlighting one fundamental issue, particularly in the light of the difficult trialogues still ongoing. If giving financial oversight authorities the power to adopt individual, directly binding decisions – as provided for in Article 10 of the regulations – responds to the political desire to react quickly to emergency situations, then in the case of daily supervision, this power conflicts with Articles 17 and 258 of the treaty, which state that it is the exclusive power of the Commission to ensure the application of the law of the Union. Furthermore, in this case, a paradoxical situation would be created in which the Member States, present in the highest body through their own authorities, would be indirectly responsible for applying the law of the Union.
As rapporteur for the opinion of the Committee on Legal Affairs, I proposed a compromise amendment which attempts to resolve this discrepancy between the powers conferred on the authorities and the role and competences of the Commission, in full compliance with the treaty. I hope that the contribution of the Legal Affairs Committee can be used as a basis for any further compromises with the other European institutions in order to arrive swiftly at a much needed solution, which is completely in accordance with the law of the Union.
Klaus-Heiner Lehne, rapporteur for the opinion of the Committee on Legal Affairs. – (DE) Madam President, ladies and gentlemen, we may have a single internal market, but we have a fragmented supervisory body. It is obvious that this cannot work. We need strong central European structures which utilise the expertise and in-depth knowledge of the Member States’ agencies, while also having intervention powers to be used in emergencies. If only in light of the huge tax burden imposed on them by this crisis, citizens are expecting a quick, sound decision to be made in this House without delay. If there are power games being played at national level merely as to who decides what, this is of little interest to citizens. What citizens want is for an effective decision to be made to get problems resolved.
Objectively speaking, if measures are required in an emergency, they must be dealt with and a decision made centrally at European level if coordination between Member States is inadequate and does not work. This is the line taken for decisions made by the G20 and G8, as well as by Heads of State or Government, but unfortunately, this is not the case at Council level. The Council only takes a narrow-minded approach. The public do not find this policy acceptable. We expect the Council to take action.
Evelyn Regner, rapporteur for the opinion of the Committee on Legal Affairs. – (DE) Madam President, Commissioners, if the European Union’s Member States want to be strong economically and externally, they must present a united front as the European Union. The financial markets supervision package, with a European Systemic Risk Board which is as powerful as possible, is therefore exactly what is needed, along with strong European – and I stress the word ‘European’ – banking, securities and insurance supervisory authorities.
The European Systemic Risk Board is – if you allow me to make the comparison – somewhat akin to the Federal President of Germany. In his current form, he does not have any far-reaching intervention powers – I would have liked him to have more – but he can display great moral authority. This means he can issue warnings, make recommendations, and all of this in public. The European Parliament – and I consider this to be a particular success – also insisted on stakeholders from civil society being included on the Board of the ESRB, in other words, consumer protection groups, trade unions and scientists. I really do regard this as an extremely positive move which should be highlighted.
On that note, I would like to call on Member States not to resort to the outdated methods of the past to create the economic order of the 21st century, but to think and act in a European spirit.
Françoise Castex, rapporteur for the opinion of the Committee on Legal Affairs. – (FR) Madam President, Commissioners, European supervision of financial markets is the minimum that we can do. It will require the regulation of rating agencies. We have seen what the instruments of speculation against states are, but the supervisory authorities that we have to introduce must not repeat the same mistakes by being both judge and jury. As a result, the issue of control has not been resolved: the control must be political. This regulation is necessary but not sufficient if we do not supplement it with an economic governance of the euro area and the European Union which goes beyond the Stability Pact. It is also insufficient if we do not take real measures against the flight of capital to tax havens. Finally, this European supervision will be insufficient if we do not take measures so that the regulation is also implemented at a global level.
A regulation at the European level is useful, but insufficient. We must have global supervision of financial markets.
Sajjad Karim, rapporteur for the opinion of the Committee on Legal Affairs. – Madam President, all has clearly not been well with financial regulation in many of our Member States. We cannot simply allow things to carry on in this dysfunctional and incoherent manner.
In the UK, the new government has taken radical action to overhaul and provide the necessary reform at a national level. Equally, the new European framework must radically improve both the quality and coherence of regulatory supervision. It needs an independent structure – truly independent in a regulatory sense – but there is a balance to be struck. The current proposals would allow the EU to overrule national regulators, and the danger is that technical standards may be used to actually make and dictate policy choices at an EU level.
Our Member States are right to resist such a move. The UK and Germany are right to adopt the positions that they have. Commissioner Rehn, Commissioner Barnier, the UK remains committed to delivery, but proper recognition of subsidiarity principles is required.
Íñigo Méndez de Vigo, rapporteur for the opinion of the Committee on Constitutional Affairs. – (ES) Madam President, I believe that there can only be two solutions for resolving the financial crisis that we have experienced: either we give more powers to national supervisors, or we create a European supervisor and give powers to it. I am glad, Madam President, that at this moment, Parliament is firmly committed, politically committed, to European supervision, and I believe that there is great consensus on this among all political groupings.
The Committee on Constitutional Affairs will support, and has supported, all institutional measures that move in this direction. It seems to me at the moment, Madam President, that once this commitment becomes manifest tomorrow, the Commission has a first order function in negotiations with the Council. During these negotiations, it seems to me that the key point will be whether these European authorities will be able to deal with companies affected directly at national level if the national supervisor is not involved.
Therefore, Commissioner, the best of luck with this task, which I believe to be a determining factor for the future of supervision and capital, at this time, for those of us who would like more Europe.
President. – I wanted to make an announcement: quite correctly, many of you have complained about the absence of the Council, but today in Belgium, there is the first sitting of the new Parliament and therefore, due to force majeure, it has not been possible to secure the presence of the Council. Let us now begin the debate with the political group speakers.
Markus Ferber, on behalf of the PPE Group. – (DE) Madam President, Commissioners, ladies and gentlemen, one could wonder what we have actually now achieved after a year spent in discussions, debates and many sessions in the trialogue, and I could have certainly imagined doing something nicer than spending my time there. One year on from the European elections, when we announced in public how we wanted to bring the finance markets into line, we are now at a point where our success rate ranges from very little to none at all.
The problem has already been explained. We are dealing with markets which operate globally nowadays. Member States still believe that they can use their national supervisory structures to apply rules in this environment. The fact that this did not work was not what actually triggered the financial crisis, but it contributed to Europe being affected by it as well. This is why I would ask when this realisation, which is often mentioned in grandiose speeches, will be converted into political action, where it is suddenly about protecting stock exchange centres and banking structures and no longer about protecting citizens.
This is the task to which we have committed ourselves as the European Parliament. I hope that Member States will commit themselves to this task, too, because we share the responsibility for implementing proper supervision regulations for citizens, which will ensure that individuals’ savings are also permanently secure. I would of course hope – and I am now addressing the Commissioners – that every effort will now be made by the Commission so that we can achieve a good outcome as quickly as possible, for the benefit of people living in Europe.
Gianni Pittella, on behalf of the S&D Group. – (IT) Madam President, ladies and gentlemen, it seems clear that the decision that Parliament is about to take – to vote on the amendments and not vote, to postpone the vote on the legislative resolution – is a desperate attempt to remind the Council of its responsibilities, so that by the next September session, this package will be approved at first reading. Honestly, I cannot believe that the myopia persists among the governments not to endow the supervisory bodies we are creating with real powers. It would be akin to creating structures unable to carry out supervision – what is the point in setting them up?
As is well known, the European Parliament is not an army of extremists making revolutionary demands. We are normal people who live among the citizens, which is to say among those who have felt the disaster of financial markets without supra-national regulation in their day-to-day lives and in their pockets. Our proposals are those of de Larosière, not Robespierre, as the fine Commissioner Barnier knows.
Friends in the Council, even if you are not here, you will read our words. We expect a positive response to our gesture of responsibility, but if it is not forthcoming, we will proceed with the vote in September and we will tell all European citizens that we want direct supervisory authority over financial intermediaries, that we want the oversight of ESMA extended to pan-European bodies as well, and that we want the European authorities to have the last word in case of disagreement between national authorities.
Dear friends in the Council, do not bury your heads in the sand like ostriches. Reality is tough, but it must be faced with choices of courage and strength.
Sharon Bowles, on behalf of the ALDE Group. – Madam President, despite good things in Solvency II, which we have already heard about, we shelved the group support regime due to concerns over its practicality in periods of economic stress, its interplay with national insolvency laws and mistrust of other countries’ supervisors. Crisis examples, such as Fortis Bank, exposed grounds for such suspicion and the need for a European supervisory architecture and discipline. Solvency II convinced me that cross-border insolvency and near-insolvency in financial institutions have to be tackled at the European level. This is challenging but it is a serious omission from the whole concept of the single market.
The Ferreira report covers many of these issues, and I thank her for including my ideas on averting moral hazard from crisis funds and a 28th regime for insolvency of cross-border banks. Now, planning is everything, and contingency plans, living wills and resolution mechanisms will reveal a lot about the present as well as protecting the future.
Philippe Lamberts, on behalf of the Verts/ALE Group. – (FR) Madam President, I would like to address the Council, and obviously I, like many of us, am frustrated that I cannot do this directly, because I would like to say to the Council that Parliament is being reasonable in this matter. It is simply asking for European supervision for European actors and national supervision for national actors. It is asking for consumer protection and, in particular, the prohibition of products which everyone here would describe as toxic, and not just here, but also in industry, in the workplace. If they are toxic, why authorise them? It is obviously asking for binding actions. All of this does not seem to me to amount to extremism. Why can the Council not accept that? I think that the patience of our fellow citizens and the patience of this Parliament is coming to an end. If we give the Belgian Presidency a chance to act, this chance will be taken and we will have results next week.
You know, we in Belgium are confronted with slogans like ‘Eigen volk eerst’ (‘Our own people first’) or ‘What we do, we do better’ and unfortunately, we find this national egotism all too often at the European level. It is this which most surely paves the way towards a future of decline for the citizens of this continent, citizens of whom we can nevertheless be proud. Thus, as Jean-Claude Trichet has said, after introducing a monetary federation, we need an economic and budgetary federation. I can think of no other name for that than a political federation.
Ivo Strejček, on behalf of the ECR Group. – (CS) I have been listening to the debate here this afternoon and thinking that some very serious words have been spoken. The first were uttered by President Barroso, when he said that ‘we are willing to do whatever it takes to protect the euro’. The second ones were spoken by one of you, who said that ‘a firmer or closer European Union could defend financial stability’. Here lies the essence of the entire debate on financial architecture and the supervision of financial architecture. We have currency union. Currency union cannot be separated – even according to the science of economics – from fiscal union, and the latter cannot exist without political union.
The citizens sitting here and watching us may quite rightly ask: ‘So what is your solution?’ We will say to them: ‘We want to create political union, but because we have now gone through the catharsis of the Treaty of Lisbon, we need to do something without you. We need to do something without giving you a say.’ In my opinion, that is the wrong approach.
Thomas Händel, on behalf of the GUE/NGL Group. – (DE) Madam President, ladies and gentlemen, we have the responsibility in this European Parliament to regulate the financial markets firmly. All the proposals we have made were strongly watered down in the trialogues. The Council and the governments do not want strong intervention rights. Mr Giegold is right when he described what is currently going on as ‘parochial’. The intention seems to be not to tighten the regulations, but simply to design a system which is slightly less prone to breaking down. We will get a fragmented supervisory structure which will be incapable of exercising proper control over the financial markets. Inadequate conclusions are being drawn from this financial and economic crisis, which means that the next crisis is already brewing.
Many national economies, including those in Europe, will not withstand the blows to come, with all the social and economic repercussions this entails for people living in Europe. They are expecting this predatory financial market capitalism to be tamed and the dominance of politics to be restored. If the CEO of UniCredit Bank, Alessandro Profumo, says as he did at the weekend that we need a strong, uniform European Financial Supervisory Authority and a common set of rules for all Member States, calling for tighter capital rules, this is an appeal to this Parliament to actually draw up these rules. It is this European Parliament’s job to exert pressure on the Council and enforce effective regulation as a matter of urgency. This would be just the first step to a status quo ante.
It is finally time for the grandiose promises to be backed up by actions. My group supports strong European regulation. Any other situation, without regulations, would pose a danger to the euro, a single EU and democracy.
Claudio Morganti, on behalf of the EFD Group. – (IT) Madam President, ladies and gentlemen, I share the aim of safeguarding the security of the markets and the investments of European citizens. I wonder, however, whether the road we are about to embark upon is the right one. I would not want the reactions of the European institutions, and ours in particular, to miss the mark in their response to the crisis and the recent financial scandals.
To create new laws and new so-called independent authorities may not, in fact, be the essential and decisive solution to the current problems. Across Europe, there are already, both at European and national level, a great many and extremely costly independent authorities which, in any case, did not avoid the market crisis, or the difficulties and financial scandals recently seen in Europe.
I agree that we need closer coordination between the various national authorities but I also believe that it is not necessary to sanction everything in this area. Maintaining the possibility of having autonomous supervisory bodies is, in my opinion, surely preferable in order to provide greater protection for investments and savers.
Finally, I am convinced that politics should take more responsibility. As the only European institution which is directly accountable to the people, I believe that we must not relinquish our prerogatives. We must not and cannot place blind trust in so-called independent authorities: they are a technical instrument for us to make use of, but they are not, and never will be, the solution per se.
Martin Ehrenhauser (NI). – (DE) Madam President, the European Union already has around 40 EU agencies. Every year, these organisations gobble up EUR 1.5 billion. The Council and Member States have never had any problem making quick-fire decisions to establish such agencies. The Council and Member States have also never had any problem with the fact that the agencies very often breach the principle of subsidiarity with their activities. Most of all, there is frequently no rationale given for these agencies.
We now have three new agencies which are going to be set up, three sensible agencies which have powers that are to be exercised in an area where the European Union can finally prove how much we need them. However, Member States are now putting up resistance in a situation where the policy has been lagging behind the global impact of the financial markets for years, if not decades. If, on the one hand, the European Union operates where it is not needed and, on the other, fails to do so where we urgently need it, the annoyance which this causes its citizens is quite understandable.
All that remains for me to do is to ask the Council finally to act sensibly and drop its obstructive attitude.
Astrid Lulling (PPE). – (FR) Madam President, I confess that I find it difficult to follow my fellow Members who are so fond of flexing their muscles and claiming a monopoly of our legitimacy in relation to the other institutions of the Union. Unfortunately, they often take a ridiculous stance. However, when the members of this House, through work and conviction, put forward a well-argued position when we defend what would appear to be the general European interest, confronted with somewhat tense nations, then it is a different matter.
In this debate on European supervision, Parliament has played this role. On the subject of the European Systemic Risk Board, for which I am the shadow rapporteur for my group, I, like the rapporteur, Mrs Goulard, defended an ambitious position. I advocated mechanisms which would ensure a certain amount of efficiency, and I emphasised the supremacy of the European Central Bank. Why is this? Because the European Central Bank is the only Community institution in this group, and because it has shown itself to be serious.
Out of a spirit of Christian charity, I will not mention the names of all the institutions and all these great figures who suddenly disappeared during the storm. We can consider ourselves fortunate to have at least had a captain on board during the worst part of the crisis. I would therefore be reassured if tomorrow we see macro-prudential supervision attached to a strong Community institution, with micro-prudential surveillance necessarily remaining fragmented.
In these troubled times, the European Systemic Risk Board must get to work as quickly as possible. The future will show if changes are necessary, but it is essential to start on a healthy basis, because systemic risks affect the entire European and worldwide banking sector.
George Sabin Cutaş (S&D). – (RO) The current economic crisis has shown us that we need a system to prevent crises and contain their adverse effects.
The de Larosière report, published in February 2009, examined financial supervision in the European Union, proposing the creation of a sui generis body which will be responsible for macro-economic supervision at European Union level and offer a solution to the current weaknesses.
In addition, the European Parliament has been asking the Commission, as far back as 2000, to come up with proposals intended to guarantee the stability of the European Union’s financial markets. In practical terms, the European Union is at a critical juncture where it must prove its worth to its citizens who are expecting it to provide solutions to the current economic recession and effective mechanisms for preventing future economic recessions.
There has been talk about a democratic deficit in the European Union, about the decline in the level of European citizens’ participation in the European Parliament elections, about their failure to identify with European policies. This is why I believe that the Treaty of Lisbon can really mark an important step towards remedying these shortcomings. However, this is only a start. A strong foundation needs to be laid which will foster confidence in Europe’s economic and political system through stability and the benefits gained.
We need an effective supervision system which will create the conditions for providing the economy with stable finances and ensuring economic growth and sustainable jobs. The unity of the European single market must also be supervised if we want to avoid its fragmentation.
This is why I ultimately feel that the creation of the European Systemic Risk Board and Financial Supervisory Authorities is appropriate.
Wolf Klinz (ALDE). – (DE) Madam President, ladies and gentlemen, even the members of the Council realise that the weaknesses of the supervisory system are or were one of the causes of the biggest global financial crisis experienced since the 1930s. They are also aware that national measures alone are not sufficient to deal with the consequences of this crisis, but that we need to look for global, or at least European, solutions.
The Council should know that the European Parliament does not want an independent European supervisory structure and systemic risk board to be set up out of dogmatism or stubbornness, but from a deeply-held, cross-party conviction. This is the only way of guaranteeing transparency and protection for investors, based on a uniform regulatory framework and a uniform interpretation and application of this framework.
One clear message from the crisis is that we need not less, but greater involvement from Europe in the financial sector; if we do not go forwards, than we will go backwards. Member States should drop the hypocrisy they display when calling for global solutions at G20 meetings and demanding at least European regulations at home, but actually refusing to make any compromise in the trialogues.
Lajos Bokros (ECR). – Madam President, we should not be complacent about our work in this area and should not look down on the United States. Actually, on the one hand, the US is much closer to making comprehensive new legislation on financial sector regulation and supervision. They are also concentrating more on substance than on a turf war. The new legislation, which is before the US Congress, envisages a consumer bureau with substantive powers to give rulings, including a total ban on specific financial products. Standardised derivatives will be traded on established exchanges and forced through clearing-houses. Hedge funds and private equity firms will have to register with the SCC over and above a certain, very large capital limit.
We are discussing how to distribute the powers between European institutions and national institutions. Well, the solution is quite easy. The macro-prudential institutions, like the ECSRB, should be closely linked with the European Central Bank, a European institution, but micro-prudential institutions need to be coordinated among national institutions.
Mario Borghezio (EFD). – (IT) Madam President, ladies and gentlemen, the measures for the supervision of the European financial system must – and this should be better emphasised in the report – have a priority objective, which must be very clear and strongly supported: to establish strict rules to control the derivatives market as this is one of the main causes, if not the main cause, of the current financial crisis.
Here, instead, we are, above all, designing a centralised institution, to some extent copied from the model of the ECB. This is not good, because at this point it is not known or fully clear what the role of the national supervisory bodies will be – the Banca d'Italia in our country. It seems that they are being watered down somewhat to the role of agent, which is not a particularly well-defined role. Instead, oversight should begin in our countries. In Italy, for example, it happens via a system of local branches which can monitor situations well.
Furthermore, why should the headquarters of the European agency be in Frankfurt? Who decided that? Based on what criteria, if not in order – I would say – to make it conformant with the European Central Bank? We propose it be sited in Milan, for example, which is a major financial and banking market, including from a geo-economic point of view due to its position at the centre of Europe.
I believe that this plan should generally go much deeper, with measures that require courage to implement, such as introducing a separation between commercial and investment banks in European legislation, based on the principles of the old US law.
Danuta Maria Hübner (PPE). – Madam President, the current crisis has taught us that when a European bank runs into trouble, its problems can spill across borders. An EU-wide system of financial supervision is being established to deal with the prevention of such situations, while an integrated European framework for cross-border crisis management will hopefully compliment the supervisory architecture as soon as possible.
The last two years have proven that relying on national approaches to cope with crises is clearly a sub-optimal solution. The new system will have to be developed in such a way that a crisis can be handled cost-effectively, moral hazards eliminated and taxpayer finance bailouts excluded. Asset transfers will have to be regulated in a manner that ensures a level playing field, especially for host countries.
The cross-border crisis management system – based on 28 regime concepts – should be designed in a way that would eliminate the interdependence between banks and national budgets. It should also contribute to the emergence of a single banking market of the Union. After all, if we had a single banking market in Europe, we would not have to talk about cross-border crisis management.
Last but not least, let me emphasise that all the elements of the European financial stability framework, as well as the resolution regime for cross-border institutions, should be adopted urgently to reduce uncertainty and fragilities in the banking sector. Having a European mechanism in place would also allow Europe to be more effective in ensuring that global solutions materialise quickly.
Edward Scicluna (S&D). – Madam President, firstly, I would like to congratulate all rapporteurs on their work on this package of highly significant reforms. This overhaul of the EU’s financial architecture has been a huge undertaking for the Committee on Economic and Monetary Affairs and has dominated much of my first year as an MEP.
I am glad that it appears that we are close to agreement. A proper functioning of Union and global financial systems and the mitigation of threats requires better consistency between macro- and micro-supervision. In retrospect, it seems astonishing that we did not have a single EU-wide macro-prudential body doing just this. Our financial markets for countries both inside and outside the eurozone are so closely integrated that an oversight body looking at market trends, asset bubbles, future causes of systemic risks and imbalances would perhaps have led to a faster, more coordinated response to the crisis.
The crisis has demonstrated many things: that our regulatory framework was not robust enough; that markets do not always self-correct; and worse, that they were exposed to unmonitored systemic risks. I welcome, in particular, the establishment of the European Systemic Risk Board, a body designed to act as a watchdog giving an early warning of systemic risks or imbalances.
In this regard, the most immediate priority is to provide a qualitative definition of systemic risk to enable effective functioning. The recent development that stress tests are to be published for some of the largest banks in the EU is welcome. I hope the Commission will follow this example, by likewise carrying out and publishing stress tests for public finances of all Member States on a regular basis.
In conclusion, Parliament has put in an enormous effort and showed political will to compromise and agree this package of reforms before the recess, but we should take heart that the deal is within sight and we can still have these reforms in place before January 2011.
Vicky Ford (ECR). – Madam President, I would like to start by thanking the rapporteurs very seriously for their enormously hard work, and the Commissioner, the Members of the Parliament and the Presidency who were still patiently negotiating at nearly midnight last night. We all agree that the ESRB and the ISAs will allow for a completely new and necessary approach to the management of financial risk across Europe; it is good, but it is not easy.
The package is five different directives which themselves amend or affect 11 more, and there are significant changes to the ways national regulators, central banks and ministers will interact. I am extremely pleased to see how close we are to a final agreement. Of the 67 articles in the ISAs, I can already see agreement on 64, and, of the three that remain, most of the sub-clauses are agreed. We should all, and the rapporteurs themselves, be very proud.
Please, next week, keep an open dialogue during the negotiations at ECOFIN. We need to get these authorities established, ensure that they have high quality staff and, if necessary, add to powers later.
Theodor Dumitru Stolojan (PPE) . – (RO) I also wish to draw attention to the activities of foreign banks in new Member States which are not part of the euro area.
These activities must be treated with the utmost importance as part of the financial system’s supervision, both at European Union and national level, in order to prevent incidences of irrational and reckless behaviour.
I support this action as foreign banks in some new Member States have created a highly sensitive risk because they have taken foreign credits in the short term and granted credits in the medium and long term to companies and citizens in these countries. This was one of the main reasons why the relevant countries urgently called on the conditional support of the International Monetary Fund.
Burkhard Balz (PPE). – (DE) Madam President, we need more supervision of the financial markets in Europe too. The economic and financial crisis has made it glaringly and painfully obvious that opportunities were missed in the past.
The European Financial Supervisory Authorities must be provided with extensive powers. They must not degenerate into empty shells which passively observe market developments. Particularly for financial institutions operating across borders, a central body is required which can join forces with the national supervisory bodies at the crucial time and provide rapid, targeted intervention. Direct intervention rights are imperative where there are differences between national authorities at times of emergencies and also where there are infringements of Community law.
The Council must finally accept the European Parliament as a legislator of equal standing. There has certainly been no lack of preparatory work by the responsible MEPs. Numerous discussions have taken place and work has been carried out in Parliament quickly and purposefully. We are now waiting for the Council to provide clear answers and concrete proposals in writing. I feel that a reference to the FIFA World Cup lends itself at the moment to describe the situation: the ball is now in the Council’s half.
Enikő Győri (PPE). – (HU) The crisis has taught us all some painful lessons. We cannot allow financial institutions to carry out speculative and unsupervised activities which pose a risk to the job security of millions. The new supervisory authorities will serve exactly this purpose. I am glad that the compromise suggestions made to the Council included amendments that are important for Central and Eastern European countries. For instance, it was accepted that central bank presidents of Member States outside the euro area will have the right to participate in the managing bodies of the European Systemic Risk Board, and it was also accepted that a simple majority decision-making process will be used if there is a dispute between supervisory authorities. The new supervisory authorities will have to be established by the start of the Hungarian Presidency, that is, by 1 January 2011. In order to reach a compromise, I believe it is necessary for both the Council and Parliament to make concessions when technically expedient and reasonable. For instance, the Council should allow the seats of all new authorities to be in Frankfurt, it should allow cross-border financial institutions to be placed under the supervision of the European supervisory bodies, and it should make it possible for these bodies to operate independently from the Commission. Parliament should also make concessions. Fellow Members, I do believe it would suffice if we focused exclusively on strategic guidance instead of establishing technical standards. Finally, ECOFIN should be granted the right to announce an economic crisis. I trust that a compromise agreement can be made along these lines by September at the latest, and that the new institutions will be in place on 1 January.
Jean-Pierre Audy (PPE). – (FR) Madam President, I am happy to find my friend Michel Barnier in this Chamber. I would also like to say to Mr Manuel García-Margallo y Marfil how grateful I am to him for accepting that, once a credit establishment is no longer regulated by a national authority, the future European banking authority will have competence in this area. I am thinking of international public banking establishments and, in particular, of the European Investment Bank.
I would like to discuss two subjects which seem to me to be important: first, accounting standards, and then the dispute that we have with our American friends on fair value.
We will have to be able to deal with this agreement in the financial sector and in the context of insurance companies and market authorities and, if not, to have our own accounting standards in these financial sectors.
Finally, if we should happen to address the question of the failure of states, I propose that we should think about the responsibility of credit institutions and, in particular, blame credit establishments for improperly supporting a state in financial difficulties. I think that it is not right that a credit establishment should continue to lend to a state which does not respect the rules of the Stability and Growth Pact.
Elena Băsescu (PPE). – (RO) This crisis has shown that we need a better mechanism for regulating financial markets across borders and for supervising them.
The main aim of the entire legislative package is to maintain financial stability within the EU, detect existing risks in the system in good time and protect investors. However, it is extremely important to avoid over-regulating the market, which could entail more red tape and even corruption.
I believe that the three European supervisory authorities and the European Systemic Risk Board will help reinforce supervision at EU level. This is why it is important for Parliament, the Council and the Commission to reach a compromise as soon as possible on the proposals for improving regulation and supervision.
Zigmantas Balčytis (S&D). – (LT) In truth, until now, many of us politicians have been unable to answer one simple question: why did this financial crisis happen, where were we before and why were we unable to forecast that it would be like this? In my understanding, we left a simple issue, the issue of control, to the financial market actors themselves. I think that today, the establishment and emergence of these three institutions is unavoidable and this really must be done. Data which will be collected by those three institutions will be very important and will be partially confidential. I believe that, as the Member of the Commission, Mr Michel Barnier, mentioned, for the main chain to be completed, we need the establishment of a European rating agency. If we have a closed circuit, in future we will be able to use the data we have collected to increase the competitiveness of the European market.
Marielle De Sarnez (ALDE). – (FR) Madam President, we have experienced a financial crisis which is very serious and deep, which has shaken the world, destabilised our economy, exacerbated unemployment and accelerated our debt, and we are still continuing to suffer its effects.
Therefore, it seems to me that our responsibility is clear. We must do everything in our power so that this does not happen again. This is why it is vital that rapporteurs, the Commission and the Council move forward together and quickly to finally achieve a worthy agreement. We need regulation and supervision. We need independent, strong authorities in the interest of Europeans. What the United States has succeeded in doing, the European Union must also do. This is the only way open to us to change things, and this is why we must succeed.
Jaroslav Paška (EFD). – (SK) The continuing turbulence on financial markets shows us that the global financial system reacts very sensitively to all information on the creditworthiness or solvency of individual players.
Even European Union countries cannot avoid suspicious looks from outside, of course, whether they are part of the euro area or not. It is therefore an elementary precondition for the functioning of the Union for every state to have a responsible and credible economic policy. However, efforts to create stricter regulation and closer supervision will not, by themselves, prevent potential crises.
The disproportionate growth of the financial sector in relation to the real economy, and its thirst for profit, lead to risky practices which have turned the global economy into a kind of casino where countries and their citizens will again provide final guarantees for financial gamblers.
We must therefore continue to work patiently for the broadest possible balanced reform of the financial system, so that the new rules can banish gambling, both from the political sphere and from financial institutions.
Salvatore Iacolino (PPE). – (IT) Madam President, ladies and gentlemen, a serious and credible European Union financial policy must put strong coordination between European policies and those of its Member States at the centre of its agenda. The new 2014-2020 programme must take this opportunity into due account since it also represents a serious prospect for sustainable development.
The authorities which need to be created to this end must develop intervention strategies consistent with the sustainable growth of the European Union and carry out ever more oversight to prevent the possible collapse of the economy, without hindering healthy entrepreneurialism. There should be a banking system – and why not, I would say above all – which simultaneously protects the family, provides better regulation and strict oversight, to give further vitality to the European economy, which requires growing prosperity.
Othmar Karas (PPE). – (DE) Madam President, I would like to address the absent Council as follows: Come back to a strong Europe with a sense of community, do not run away from reality, look the citizens in the eyes and do not abandon responsibility to future generations.
We need more involvement from Europe. The proposal tabled by the Commission already provides a minimum scenario. We need strong supervision with teeth, a right of intervention and a mediator function. We need decisions without further notice in emergencies. We require banking supervision as part of crisis management. The safeguard clause is an obstructive instrument and contravenes Community solidarity.
We need strong supervision with teeth. We should agree next week, stop stalling and tell our citizens that we are ready and willing to take up the challenge.
Janusz Władysław Zemke (S&D). – (PL) Madam President, thank you very much for giving me the floor. I would like to stress very strongly that what we are talking about, today, does not just concern the economy in individual Member States, but it concerns 500 million people.
It is very good that the Union is not passive in ensuring financial security. In this regard, the increased activity on the part of Parliament itself, the European Commission and the European Central Bank is worthy of note. I fully agree with the idea that we should support Member States in crisis situations, but ‘support’ does not mean ‘bail out’. Let us remember to link the responsibility of the Union to the responsibility of all Member States. Better supervision at European level is a very good idea, but we should also make greater demands in the area of supervision in individual Member States.
Alexandra Thein (ALDE). – (DE) Madam President, Commissioner, the financial crisis has highlighted that a uniform financial supervisory authority is an absolute necessity for the European Union. The three EU-wide supervisory authorities which are envisaged for banking, insurance and securities should thereby be provided with the right to intervene directly in national institutions, such as Deutsche Bank.
These intervention rights are restricted to absolutely exceptional cases and will hopefully never be used. As a member of the Committee on Legal Affairs, I regret that the committee responsible has not given any consideration to our constitutional objections regarding the envisaged intervention rights, both at European and national level, especially in the wake of the Lisbon judgment of the German Federal Constitutional Court. A recommendation from the Committee on Legal Affairs, whereby the Commission, as guardian of the treaties, would act as the final decision-making authority within the framework of a set procedure, or, in other words, have the last say, was not followed.
On this point, the Committee on Legal Affairs recognises that the technical expertise required to make judgments is indisputably available in the national and European supervisory authorities and not in the Commission. I hope that during the current negotiations, too, a solution will also be found to this constitutional problem.
Oreste Rossi (EFD). – (IT) Madam President, ladies and gentlemen, at a time of economic and financial crisis, the European Union should adopt strong measures at European level, increasing control over banking institutions and financial markets.
The creation of four new control bodies could be a valid alternative, guaranteeing strict cooperation with the national supervisory bodies. It would not be a matter of having bodies responsible for monitoring their entire field of responsibility, but specific financial institutions composed of top-level representatives from the national supervisory bodies, who would contribute to harmonising standards and regulation across the EU States. In particular, the European Banking Authority will evaluate the access to, and availability and cost of, credit for consumers and small and medium-sized enterprises.
Following the G20, unfortunately, the idea of taxing banks – which was strongly supported by President Barroso and Mr Van Rompuy – was not even taken into consideration. In a Europe which is ever more exposed to the crisis, we need to act together to build common rules to protect citizens and investors.
Thomas Mann (PPE). – (DE) Madam President, an effective European banking supervisory authority, as presented in the report from Mr García-Margallo y Marfil, will contribute to the architecture of a new financial control system. We want to keep systemic risks permanently to a minimum. To do this, we obviously need the banks’ equity base, which has to be strengthened, among other reasons, in order to carry out business activities entailing less risk. However, precedence is given to national supervisory authorities, which are finally cooperating with each other and keeping each other fully informed, thereby preventing risky transactions.
The importance of own national interests, as stipulated by some EU finance ministers, must take a back seat. It would be disastrous if even one Member State stepped out of line, and this does not just refer to countries in the euro area. The Presidency of the Council, which happens to be absent, must assume responsibility for conducting a close dialogue with the European Parliament and the Commission and for redirecting the current national thinking towards joint, consistent, long-term action. For the sake of taxpayers, we need more involvement from Europe, not less.
Seán Kelly (PPE). – Madam President, the fact that 64 of the 67 articles have already been agreed indicates that not only are people happy with what has been proposed but that they are absolutely delighted that somebody, somewhere, is taking control of a situation that ran amok for too long and caused the terrible situation we are now in. Where ordinary people are concerned, they see these proposals as bringing hope where there was despair, control where there was disorder, honesty where there was corruption, and optimism where there was pessimism.
Certainly, today’s message goes out loud and clear, not just to banks, regulators and speculators – and indeed weak governments – not that they are too big to fail, but that from now on, they are too big to fail to perform. If they fail to perform, they have somebody to answer to. That is a key message.
I would like to conclude by saying that I have no problem with institutions being based in Frankfurt. After all, Germany has been a better model of financial propriety than many others.
Gay Mitchell (PPE). – Madam President, in large part, the problem caused in Ireland by the banking and financial crisis can be traced to overpriced assets, particularly houses, but also other properties that banks loan money on.
The European Central Bank has been enormously successful in controlling inflation in the European Union, other than asset inflation. For two and a half years, at every meeting of the Economic and Monetary Affairs Committee with the President of the Central Bank, I raised the question of what could be done to control asset inflation.
Having low interest rates, where the interest rate is used as a method of controlling our inflation, is a very good instrument when used for lower interest rates or higher interest rates. The problem is that we ignore asset inflation. We have to find, under these new institutions, a way of bringing asset inflation into the calculations and of having an early warning system that deals with assets, particularly house price inflation, because this is at the centre of the problem in some of our countries and in my country in particular.
Michel Barnier, Member of the Commission. – (FR) Madam President, first I must apologise for the absence of Mr Rehn, who has had to take an aeroplane, but who has largely heard the essential parts of our speeches. I will report all those matters to him which may concern him directly.
I would first like to draw the attention of the Chair, Mrs Bowles, and Mrs Ferreira to the importance that I attach to this whole system of prevention and precaution. Mrs Bowles reminded us of the need for early intervention measures. I think that these are good ideas. You will find them again in the Commission’s communications in October, in the toolbox, and in the legislation that I will present in 2011. I would like to say finally, Madam President, that I will be very careful to see that we get it right on Solvency II, and also on everything that affects the implementation of Basel.
Many of you, ladies and gentlemen – Mr Ferber, a moment ago, Mrs Győri, Mr Balčytis, Mr Karas just now – mentioned the citizens. I think that it is good to remind people of the shock, the concertina effect, the human social consequences of this financial crisis, along with its economic and social consequences, which have not come to an end. We are indeed carrying out this reform for the citizens. I think, like many of you, that if a new crisis should occur – the risks in various sectors were mentioned a moment ago – without us having learned the lessons from the financial crisis over the past two years, and without us having created tools of prevention and precaution, the citizens will not forgive us. This is very much a reform for the citizens. This is a question of putting financial services, the markets, in the service of the real economy, employment and therefore the citizens. This is one of my priorities, quite apart from what we are saying at the moment this afternoon, Madam President, on other points of concern to the citizens, such as the protection of citizens who are consumers of certain financial products.
Just today, the Commission adopted, at my suggestion, the revision of the directive on deposit guarantees, the revision of the directive on compensation for investors and a White Paper on guarantees in the insurance sector.
Mrs Lulling mentioned a point which is of interest to my colleague, Olli Rehn. It is clear, Mrs Lulling, that the President of the Central Bank must have a pre-eminent role in the European Systemic Risk Board. The exact mechanism for nominating the president is a point on which we are working with my colleague, Olli Rehn.
Mr Klinz, I would like to thank you for the support that you are showing us. You reminded us of the importance of applying our rules properly. This is the very idea behind a single rule book, which I am personally very much in favour of.
I would like to say again to Mr Lamberts and Mr Giegold, who is here, that the question of the European authorities prohibiting certain products or certain transactions is an idea which interests me. I am open to this idea, which would mean that the supervisory authorities grouped together in the new European network must be proactive in the supervision of products, particularly the most harmful ones, which may pose a risk to financial stability and the protection of consumers that I have just mentioned. That must be embarked upon, Mr Giegold, well before we talk about a ban. I could imagine an important coordinating role for the authorities in this area. The Council also accepted that the authorities may have such a role. I think that it is possible to come to an agreement on a text which ensures a large scope of application while foreseeing the possibility of taking action on dangerous products or transactions.
Mrs Hübner, Mr Méndez de Vigo, Mr Balz and Mr Audy mentioned the cross-border mission of these institutions. The proposal of the ECON committee to hand control of cross-border institutions to the authorities is an option which poses political and technical problems that I suggest you should not ignore. The important thing for me is to have in place, by 1 January 2011, authorities which have real binding powers to deal with the lack of coordination and the weakness or failure of supervision noticed in the past, to act in cases of emergency, to ensure respect for Community law and to control the rating agencies that many of you have mentioned this afternoon.
Then, after these authorities have been functioning for three years, and when their reputation on the markets is established, we will carry out an evaluation together with you to see if a change in competences is required.
Mr Bodu, the Chair, Mr Lehne, and Mrs Regner also gave their support to the work that we are doing together. I think that we effectively need, as I have just said, real European supervision which is efficient and coordinated. This is why it is very important that we use the days that we have before us intelligently so that we can succeed in convincing the Council to grab the ball that is now in its court, and to take the opportunity that you have offered it to provide detail on these matters and to reach a true agreement.
Mr Baldassarre mentioned a worry that Mr Lehne also has concerning the powers of the authorities. I would like to remind Mr Baldassarre that the proposals that I have made on behalf of the Commission, which were also made before me, have been prepared with our legal service, without prejudice to the powers of the Commission.
Mr Pittella, Mr Méndez de Vigo, Mrs De Sarnez just now, Mrs Goulard, Mr Ferber and Mrs Lulling reminded us of the ambition of the proposals put forward by the de Larosière group. As Mrs Goulard also said, I would remind you that these are proposals that were made at the request of President Barroso. We have tried, in the Commission proposal, to stay as close as possible and even sometimes to go a bit further than the ambition of the de Larosière report on this European architecture. I would like to repeat to you my wish, in the weeks and, I hope, the days to come, with the cooperation that we will enjoy with the council of finance ministers, to stay as close as possible to the credibility and ambition of these initial proposals by the Commission, which are based on the proposal by Mr de Larosière.
I would like to say a word on a subject which Mr Bokros and Mr Audy mentioned earlier on relating to accounting standards. This has to do with the transatlantic calibration that I sometimes mention. I am not worried about the energetic interaction between Americans and Europeans. At the moment, 80% of financial exchanges take place on both sides of the Atlantic. The other regions of the world are there, between the Americans and the Europeans. I notice that President Obama and European leaders have signed the agreements and have taken the decisions together at the G20. We therefore have the same road map. Also, the last G20 was something of a follow-up G20, in my view. Even if it were only that, it is important that we show the same determination to implement what has already been decided and which is a long way from being implemented. The Americans adopted a different method from our own – they adopted a global package. They will now need to open the drawers one by one to implement these decisions. As for us, we have a series of proposals, which are currently being examined, on the regulation on hedge funds and private equity, the one which has just been adopted on CRD 3, and the one which I hope will be adopted on supervision.
Brick by brick, week after week, we will come up with all the proposals expected of the Commission in implementing the G20 decisions. This is why I wanted not just to do the same thing as the Americans, but to give you an overall vision so that journalists, businesses, markets, citizens and European and national parliamentarians have an overall global vision, and to put this entire agenda into a complete and coherent document, which was adopted last 2 June and which is now our road map.
On some points, the Americans have achieved somewhat more, but we will also take action on one extremely important point, namely the regulation of derivatives and short selling, this coming September.
I think that there are real parallels between the Americans and the Europeans. We are not always using the same tools, and we will not always use the same methods. Our banking sectors are quite dissimilar. I would remind you that in Europe, the banks finance between two-thirds and three-quarters of the economy. In the United States, it is the other way around. We do not always have the same banking structures. We will not always have the same tools, but we must achieve the same objectives within a similar timescale. The only point, Madam President, where we have a debate which may become a matter of divergence is the point that Mr Audy mentioned, which is the extremely important point regarding accounting standards. On this subject, we are having a confident dialogue with the Americans, but one without naivety.
That is what I would say in conclusion, and I thank you for your speeches.
IN THE CHAIR: MIGUEL ANGEL MARTÍNEZ MARTÍNEZ Vice-President
Ramon Tremosa i Balcells, rapporteur. – Mr President, I propose that we imagine for a moment what would have happened in Europe with this huge crisis without the euro. In my case, I could argue that Spain would probably have had a big corralito.
The euro was created 11 years ago. Creating a single currency was not an easy process and there were great speculative attacks on very important European currencies. However, I think that the benefits and advantages of the euro for the eurozone citizens are much higher than the costs associated with it.
Dear colleagues, now we are experiencing another European momentum; another European train – European financial supervision – has arrived at the train station and it is waiting for the European countries to jump on board.
Let me also say that we will not have another opportunity to rescue the financial sector if there is another financial crisis and we continue doing business as usual. I will not say ‘in the ECB we trust’, because I know that my colleague, Sven Giegold, does not like to mix economy and religion, but the further step towards a European financial authority increases the role of the European Central Bank in European financial supervision.
Antolín Sánchez Presedo, rapporteur. – (ES) Mr President, Commissioner, ladies and gentlemen, the European Union has a special responsibility within the area of financial services, as it is the world leader with regard to banking and insurance, and the world’s second largest securities market. Europeans expect a system of supervision that guarantees the reliability and strength of our financial services and we cannot disappoint them.
I believe that we should make use of the time and reach a speedy agreement. We could go further in three directions: firstly, ensuring the effectiveness of decisions by the authorities in cases of emergency; secondly, clearly demonstrating our commitment to savers having priority with regard to protection for deposit institutions; thirdly, moving towards a European system for crisis resolution. Those who advocated self-regulation in the past now need to accept self-financing. The public cannot be the ones who have to pay the bills and carry the can during the next crisis.
There are three directions within the ‘Omnibus’ Directive: firstly, adapting ourselves to the Treaty of Lisbon; secondly, increasing transparency, providing information on sanctions to the European Securities and Markets Authority, and ensuring that financial institutions provide the information required to guarantee responsible investment; and thirdly, ensuring that there are correlation tables for the transposition of directives.
I would like to end by expressing my thanks to the rapporteurs: my compatriots Mr Tremosa and Mr García-Margallo, Mr Giegold and Mrs Goulard, Mr Skinner and Mrs Ferreira. I would also like to thank the shadow rapporteurs, those who put forward amendments, all those who made contributions, the secretarial staff, the group administrators and my assistants. They have done an excellent job, which has not yet borne fruit. I would also like to say that I acknowledge the work of the representatives of the Presidency and the Commission. However, we do not have Cassandra’s calling within this House; we wish to legislate and carry out effective supervision.
Sven Giegold, rapporteur. – (DE) Mr President, Mr Tremosa i Balcells, ladies and gentlemen, even if I feel tempted now to touch on the subject of religion, mainly because of the emphasis placed several times on the principle of subsidiarity, I always find it irritating whenever this principle inspired by Christian social ethics is used to state that we should have as little as possible at European level. This principle clearly states that everything should be regulated at the level where it can be best regulated, and at the lowest possible level. However, what we have seen is that financial supervision involving major cross-border institutions in a single internal market is simply no longer working at national level. It is a pity therefore that my fellow Members are no longer present. Otherwise, I would have been glad to make them even more familiar with the principles of Christian social ethics.
However, one thing which is also important to me is this compromise which we are now producing. We hope – obviously with your help, Mr Barnier – that we will actually now produce it quickly in order to avoid any misunderstanding here. Parliament tabled a last-minute compromise last week. According to the current interpretation we have, the points on which we indicate that we would be willing to change our position again, as part of a compromise we find difficult, are now taken as read, and all the other points are to be renegotiated.
The rationale behind this is as follows; Parliament will approve because we all want the authorities to get started on 1 January 2011. The only thing I can say about this is that we all want the authorities to get started, but we will fight for strong powers. It does not work if an inch being given ultimately results in a mile being taken. This method will fail. The consensus in Parliament on this is too strong, and we want a compromise, but only with strong powers. I hope that this signal is also clearly understood by the absent Council. Otherwise, we are all going to find it very uncomfortable next week.
Sylvie Goulard, rapporteur. – (FR) Mr President, Commissioner, I would like to say three things.
The first is that while we are flexible on the procedure, we will be even stricter on the substance. Let us be quite clear. We have made an effort. This Parliament agreed to interrupt the procedure of first reading. Nothing forced us to do that, other than the desire, which you have yourself shown, to seek a compromise, to have a discussion with each other. This should not end up as cherry picking. No. Parliament has, for a number of months now, been developing a very consistent vision, and I thank all my fellow Members for this. I cannot mention all of them. I will just mention Mr Karas as an example, who emphasised the fact that we wanted a European solution. This is our line; this is what we believe in for reasons of efficiency.
My second remark has to do with the date. Yes, we want something by 1 January and, furthermore, I would say that I could repeat Mr Giegold’s words exactly: ‘we spend so much time together and we are so much in agreement that we end up repeating ourselves’, but I repeat this once again. The date is not a fetish. We do not want 1 January for its own sake. It is 1 January with good reason. What we do not want is to put pressure on Parliament only to get, on 1 January, a pretence of European supervision.
Finally, I would like to thank all the shadow rapporteurs and all my colleagues here who have spoken, because we feel that there is a genuine basic unity in this Parliament. Of course, everyone has their sensitive issues here, but we need to ask ourselves – and, Commissioner, I would also have asked this question if the Presidency had been here – what will we take back to the citizens at the end of all this. Will we have at least laid the foundations – I will not go as far as saying the top floor, but at least the foundations – of a solid European house, or will we return with one of these pseudo-compromises which the Council has a taste for, but which Parliament would quite happily do without?
José Manuel García-Margallo y Marfil, rapporteur. – (ES) Mr President, Commissioner, please inform the Council that there is a convergence of opinions in this House that is rarely seen.
The Council must take note: for six months, it has been telling us that it had a fixed mandate from the Swedish Presidency, and now we also have a mandate.
While we are talking about Cassandra, the important thing is not to prophesise the past, which is what the Spanish Presidency did, but to prophesise the future, which is what the Belgian Presidency seems to want to do.
We have a consensus that is just as strong as the one within the Council, with an added advantage, which is that the winds favour Parliament’s stance and do not favour the old and anachronistic stance that the Council maintained up until the start of the Belgian Presidency.
We have the advantage that we incorporated proposals that had been rejected; proposals that were in the de Larosière report, such as the resolution mechanisms to which Mrs Ferreira has referred. It makes no sense to put in place a supervisor that can forecast the weather but cannot do anything in the case of shipwreck.
We have the advantage that we anticipated things that other institutions said later. When we talked about systemic institutions, we were told that there was no such species; the European Council acknowledged its existence in March.
When we talked about how the taxpayer should not have to bear the cost of the crisis and that pre-financed funds should be established by the sector for facing up to its responsibilities, we were told that this was premature, utopian or simply idiotic. Then, the Europe 2020 strategy adopted by the Commission said it, Ecofin said it, the European Council said it and took it to Toronto, and I would not understand why they are not advocating it now.
(The President cut off the speaker)
Peter Skinner, rapporteur. – Mr President, Bill Shankly, a famous Liverpool football manager was once asked by columnists whether he thought football was a matter of life and death. He replied ‘no, it’s much more serious than that’. I think that the passion which he showed then is also being shown by many of the rapporteurs and the shadows in this particular field. I would like to thank everybody who has participated in this. We have converged from different directions but we have come out with a strong Parliament voice. I think it is convincing – here we stand united – being able to convince many that this is right and appropriate at the European level of discussion.
The White Paper on the insurance guarantee scheme which you mentioned, Mr Commissioner, is, in fact, very important for us, and we look forward to that. Alongside the issues of binding mediation, it carries us towards what Sharon Bowles was referring to in terms of the issue of group support – something which was left out of Solvency II. Indeed, in terms of supervision, on a scale of things, I think we can be rightly proud that what we have is still a very ambitious project, something that I believe will lead to the right actions at European level in the future. We should be proud.
On an international level, we should be proud too. I would agree with you, Mr Commissioner, that in comparison with the United States, we can speak positively about what we have done in our backyard on structural reform that the United States has failed to achieve, even in its most recent finance bill, especially in insurance, and that we can take this to Washington when we need to.
However, I do not necessarily agree with you on international financial accounting. You will not be surprised to hear that. I do not agree with using historical trends.
Nevertheless, on supervision, the rapporteurs deserve a pat on the back. We have far to go and I think it is close, but it is like a game of football after all. We have gone through full time, we are now in extra time. Let us hope it does not have to go to a penalty shoot-out.
Elisa Ferreira, rapporteur. – (PT) I will try to be very brief here in underlining just four points. The first of them is that it has been an extraordinary experience to work in such a united way with my fellow Members from other political groupings. My thanks for having integrated me into the supervision package and, in particular, many thanks to Mr García-Margallo for all his cooperation.
Secondly, I would like to thank my personal assistants and also the fellow Members who made contributions to the specific report under my responsibility, which enabled me to incorporate 90% of their proposals.
A special mention for the office staff, for Susana Vravova, and for the services of the committee.
Finally, my thanks to the Commissioner for his services and for very clearly expressing his hope that – above and beyond the report, which I hope will be adopted tomorrow – it will be possible to build a solid base, a base that is truly European, for the protection of Europeans.
President. – The joint debate is closed. The vote will take place tomorrow, Wednesday, 7 July 2010, at 12:00.
Written statements (Rule 149)
Alfredo Pallone (PPE), in writing. – (IT) The EU cannot tackle this type of emergency promptly and effectively because it lacks suitable political and economic mechanisms and common rules. Firstly, we need a supervisory system that actually works, that goes beyond the bureaucratic approach used so far to tackle the systemic crises. Secondly, it is crucially important to coordinate and harmonise economic and fiscal policies, even if it means leaving behind those countries that are most reluctant to harmonise these policies. The European Union has a political, social and moral duty to intervene. That duty finds its justification in the values underpinning the Union and enshrined in the treaties. First and foremost, however, the Union has its own concern: the recent global crisis has already amply demonstrated how interconnected the financial systems are, and the Member States of the euro area are even more interconnected. Thus, in order to avert a crisis that could have much more serious consequences, it is necessary to monitor and intervene by means of strict external controls. The economy can only function with healthy financial markets dedicated to it. This is one of the conditions that must be met if citizens are to make the internal market, the European market, their own.